OMB's Request for Comment on Marginal Excess Tax Burden & EO 13771

February 21, 2020

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The Office of Management and Budget (OMB) has requested advice on incorporating a measure of “marginal excess tax burden” (METB) as a potential cost under the regulatory cost accounting system mandated by Executive Order (E.O.) 13771. This public interest comment begins by making some general observations about the use of METB in the context of budgetary, tax, and regulatory policy. It then offers responses to the eight specific questions listed in the OMB notice.

General Comments on Using METB for Spending, Taxing, and Regulation

The METB is a major component of the cost of government, and its broader use can help promote better decisions about government spending and regulation. OMB should certainly proceed to incorporate METB estimates into its accounting reports under E.O. 13771. This aggregated reporting will be of limited use, however, if OMB does not also encourage its use in the analysis of spending decisions, tax policy decisions, and individual regulatory decisions.